Township of Millcreek, PA Article II Fire Loss Insurance Proceeds

[Adopted 2-14-1995 by Ord. No. 95-3]

§ 55-2 Appointment of Treasurer/Comptroller.

The Treasurer/Comptroller or his designee is hereby appointed as the designated officer authorized to carry out all responsibilities and duties established under Section 508 of the Insurance Company Law of 1921, as amended,[1] and by this article.

[1] Editor's Note: See 40 P.S. § 638.

§ 55-3 Certificate of insurance required.

No insurance company, association or exchange (hereinafter "insuring agent") doing business in the Commonwealth of Pennsylvania shall pay a claim of a named insured for fire damage to a structure located within the Township of Millcreek (hereinafter "Township") where the amount recoverable for the fire loss to the building or other structures under all policies of insurance exceeds $7,500, unless the named insured or insurance agent is first furnished with a certificate by the Township Treasurer/Comptroller or his designee pursuant to Section 508(b) of the Insurance Company Law of 1921,[1] as amended, and unless there is compliance with Section 508(c) and (d) of said law and with the provisions of this article.

[1] Editor's Note: See 40 P.S. § 638(b).

§ 55-4 Certificate or bill to be issued.

The Treasurer/Comptroller shall, upon receipt of a written request of the named insured specifying the address and tax index number of the property, the name and address of the insuring agent and the date agreed upon by the insuring agent and the named insured as the date of the receipt of a report of the claim, furnish to the insuring agent within 14 working days after receipt of the request:

A. A certificate or, at such officer's discretion, a verbal notification which shall be confirmed in writing by the insuring agent to the effect that as of the date specified in the request, there are no delinquent taxes, assessments, penalties or user charges against the property and that, as of the date of the Treasurer's certificate or verbal notification, no municipality has certified any amount as total costs incurred by the municipality for the removal, repair or securing of a building or other structure on the property; or

B. A certificate and bill showing the amount of delinquent taxes, assessments, penalties and user charges against the property as of the date specified in the request that have not been paid as of the date of the certificate and also showing, as of the date of the Treasurer's certificate, the amount of the total costs, if any, certified to the Treasurer that have been incurred by a municipality for the removal, repair or securing of a building or other structure on the property, after receipt by the Treasurer of a written certification by such municipality as to the total amount, if any, of such costs. A tax, assessment, penalty or user charge becomes delinquent at the time and on the date a lien could otherwise have been filed against the property by the municipality under applicable law, 53 P.S. §§ 7102, 7103, and 7106, providing that taxes and municipal claims constitute liens against a subject premises from the date of their assessment or imposition.

§ 55-5 Payment of claim.

Where, pursuant to Section 508(b)(1)(i) of the Insurance Company Law,[1] the Treasurer/Comptroller issues a certificate indicating that there are no delinquent taxes, assessments, penalties or user charges against the real property, the insuring agent shall pay the claim of the named insured; provided, however, that if the loss is agreed by the named insured and the insuring agent(s) equals or exceeds 60% of the aggregate limits of liability of all fire policies covering the building or other structures, the following procedures must be followed:

A. The insuring agent(s) shall transfer from the insurance proceeds to the Township's Treasurer in the aggregate $2,000 for each $15,000 and fraction of that amount of a claim as security for the proper securing, repair, demolition and/or removal of damaged structures upon the premises; or

B. If, at the time of a loss report, the named insured has submitted a contractor's signed estimate of the costs of removing, repairing or securing the building or other structure in an amount less than the amount calculated under the transfer formula set forth in Subsection A, the insuring agent shall transfer from the insurance proceeds the amount specified in the estimate.

C. The transfer of proceeds under this section shall be on a pro rata basis by all insuring agents insuring the building or other structures, and policy proceeds remaining after the transfer to the Township shall be disbursed in accordance with the policy terms.

D. The named insured may submit a contractor's signed estimate of the costs of removing, repairing or securing the building or other structure after the transfer of policy proceeds to the Township, and the Treasurer/Comptroller or his designee shall return the amount of the fund in excess of the estimate to the named insured, if the Township has not by then commenced to remove, repair or secure the building or other damaged structure.

[1] Editor's Note: See 40 P.S. § 638(b)(1)(i).

§ 55-6 Receipt and disposition of claim proceeds.

Upon receipt of proceeds by Millcreek Township as authorized under § 55-5 of this article, the following procedure shall apply:

A. The Treasurer/Comptroller or his designee shall place the proceeds in a separate fund to be used solely as security against the total cost of removing, repairing or securing the building or other structures which are incurred by the Township. Such costs shall include, without limitation, all engineering, legal or administrative costs incurred by the Township in connection with such removal, repair or securing of the building or of other structures;

B. When transferring the funds as required in Section 508(c) of the Insurance Company Law[1] and by this article, an insuring agent shall provide the Township with the name and address of the named insured, whereupon the Township shall contact the named insured, certify that the proceeds have been received by the Township and notify the named insured that the procedures under this section shall be followed;

[1] Editor's Note: See 40 P.S. § 638(c).

C. The fund shall be returned to the named insured when repairs, removal or security of the building or other structure have been completed and the required proof received by the Township Treasurer if Millcreek Township has not incurred any costs for repairs, removal or securing;

D. If Millcreek Township has incurred costs for repairs, removal or securing of the building or other structures, all such costs shall be paid from the fund and, if excess funds remain, Millcreek Township shall transfer the remaining funds to the named insured;

E. To the extent that interest is earned on proceeds held by the Township pursuant to this article and not returned to the named insured, such interest shall belong to and be retained by the Township. To the extent that proceeds are returned to the named insured, interest earned on such proceeds shall be distributed to the named insured at the time that the proceeds are returned by the Township;

F. Nothing in this section or article shall be construed to limit the ability of the Township to recover any deficiency; and

G. Nothing in this article shall be construed to prohibit Millcreek Township and the named insured from entering into an agreement that permits the transfer of funds to the named insured if some other reasonable disposition of the damaged property has been negotiated.

§ 55-7 Adoption and implementation of procedures and fees.

The Township of Millcreek may by resolution adopt modified procedures and regulations to implement this article and may, by resolution, fix reasonable fees to be charged for municipal activities or services provided pursuant to Section 508 of the Insurance Company Law of 1921[1] and this article, including but not limited to these for issuance of certificates and bills, performance of inspections, legal and administrative services and the opening of separate fund accounts. With the exception of allowance by Section 508 of the Insurance Company Law and this article of verbal notification by the Treasurer, the November 10, 1992 resolution of the Board of Supervisors implementing procedures shall be and remain in full effect.

[1] Editor's Note: See 40 P.S. § 638.

§ 55-8 Violations and penalties.

[Amended 8-28-2007 by Ord. No. 2007-6]

Any owner of property, any named insured and/or any insuring agent who violates this article shall be subject to a penalty of $600 per violation.

§ 55-9 Filing.

In accordance with the requirements of Section 508(i) of the Insurance Company Law, as amended,[1] the Township Secretary shall, upon adoption of this article, file with the Pennsylvania Department of Community Affairs an exact copy of this article, together with the name, position and telephone number of the Township Treasurer assigned responsibility for compliance with this article.

[1] Editor's Note: See 40 P.S. § 638(i).